Labels start making more money from streaming than downloads

Streaming is starting to overtake digital downloads as a source of revenue for independent labels, according to a new blog post from British indie music heavyweight PIAS (hat tip to Hypebot). The company, which runs a couple of indie labels itself but also provides funding and distribution services to other indies, saw higher revenues from streaming than downloads in 24 markets last year, including countries like France, the Netherlands and Spain.

The transition seems to be a little slower in bigger markets like the U.K.. Here’s how PIAS commercial operations manager James Howdle put it:

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“I certainly expect streaming will overtake downloads in the next two years in the UK market. It’s hard to say how that will then compare to physical CDs, which continue to be the biggest single format for driving revenue in the territory … I think we will reach a point of equilibrium where physical sales continue to generate a significant proportion of sales while streaming becomes the dominant form of digital consumption.”

In other words: Paid music downloads may just fade away as more people get used to either paying a monthly fee for ad-free streaming or tuning into ad-supported streaming services.

Howdle has especially high hopes for YouTube’s streaming service, which is still in closed beta, as well as Apple’s yet-to-be-announced plans to launch a streaming service as part of iTunes this year. “Apple and YouTube’s entrance into the subscription streaming market this year will definitely change and accelerate the market considerably,” he wrote.